(AFP) Malaysia will award third generation (3G) mobile phone spectrum licenses to Telekom Malaysia, DiGi.Com and Maxis Communications, a report said today.

Quoting unnamed sources, the Business Times daily said the three network operators were chosen on the basis of their financial capability in rolling out the costly services, adding the decision was made late December.

The report said the government might also waive the RM50 million license fee.

Malaysia has two other mobile phone network operators servicing its more than seven million active mobile phone subscribers. The others are Technology Resources Industries and TimedotCom.

Last year, the government announced it would award 3G licenses to three network facility providers via a "beauty contest" by July this year, with the service to be launched by end-2003.

Prime Minister Dr Mahathir Mohamad had ruled out the option of an auction of the 3G licenses because high bids at auctions in other countries had been too costly for the companies that secured the licenses.

Third-generation mobile phone services allow speedy access to data and video through the Internet